EU slaps Intel with record £948m fine

As expected, the European Union has today slapped Intel with a record fine of €1.06 billion (£948 million, $1.45 billion) for violating EC Treaty antitrust rules on the abuse of its dominant market position.

The Commission said that Intel engaged in illegal anticompetitive practices designed to exclude competitors from the CPU market and has ordered the chip maker to cease the illegal practices immediately as it believes the company is still abusing its position.

The investigation spans a number of years following the initial complaint lodged by AMD in 2000.

Commissioners found Intel guilty of illegal business practices on two counts. It ruled that Intel had given wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel. It also said that Intel made direct payments to a major retailer on condition it stock only computers with Intel x86 CPUs.

"Such rebates and payments effectively prevented customers - and ultimately consumers - from choosing alternative products," said a statement released by the EC.

The second count ruled that Intel had made direct payments to computer manufacturers to halt or delay the launch of specific products containing AMD's CPUs (in particular) and to limit the sales channels available to these products.

Competition Commissioner Neelie Kroes said: "Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years. Such a serious and sustained violation of the EU's antitrust rules cannot be tolerated."

The fine certainly dwarfs the €497 million fine levied against Microsoft in 2004 for abusing its dominant position in the market, but is it enough? Let us know your thoughts in the forums.

The second episode of the all new combined Custom PC and bit-tech podcast is here. It's louder than ever and packed with tech discussion, including our thoughts on the massive fine given to Intel by the EU, whether monopolies are inevitable in IT, the regular guess the game music competition and more.